The management of Urbine Corporation is considering the purchase of a machine that would cost...
Question:
The management of Urbine Corporation is considering the purchase of a machine that would cost $310,000 would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $74,000 per year. the company requires a minimum pretax return of 12% on all investment projects. (ignore income taxes in this problem). The net present value of the proposed project is closest to:
a. $43,230
b. $3,230
c. $65,910
d. $20,550
Net Present Value:
The net present value method is one of the capital budgeting techniques used for evaluating a capital budget, others being, internal rate of return method, profitability index method, payback period method etc. This method is also preferred where the firm is required to choose a single project out of mutually exclusive projects.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerThe calculated net present value of the proposed project is closest to option a. -$43,230.
The net present value of the project can be calculated by...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
How to Calculate Net Present Value: Definition, Formula & Analysis
from
Chapter 5 / Lesson 20
18K
Learn about what net present value is, how it is calculated both for a lump sum and for a stream of income over multiple years. View some examples on NPV.
Related to this Question
- The management of Urbine Corporation is considering the purchase of a machine that would cost $320,000 would last for 5 years, and would have no salvage value. The machine would reduce labor and other
- The management of Urbine Corporation is considering the purchase of a machine that would cost $330,000 would last for 6 years, and would have no salvage value. The machine would reduce labor and other
- The management of Urbine Corporation is considering the purchase of a machine that would cost $430,000 would last for 5 years, and would have no salvage value. The machine would reduce labor and other
- The management of Urbine Corporation is considering the purchase of a machine that would cost $310,000 would last for 6 years, and would have no salvage value. The machine would reduce labor and other
- The management of Urbine Corporation is considering the purchase of a machine that would cost $380,000 would last for 5 years, and would have no salvage value. The machine would reduce labor and other
- The management of Urbine Corporation is considering the purchase of a machine that would cost $300,000 would last for 6 years, and would have no salvage value. The machine would reduce labor and other
- The management of Urbine Corporation is considering the purchase of a machine that would cost $310,000 would last for 6 years and would have no salvage value. The machine would reduce labor and other costs by $60,000 per year. The company requires a minim
- The management of Urbine Corporation is considering the purchase of a machine that would cost $360,000, last for 10 years, and have no salvage value. The machine would reduce labor and other costs by $50,000 per year. The company requires a minimum pretax
- The management of Urbine Corporation is considering the purchase of a machine that would cost $410,000 would last for 7 years, and would have no salvage value. The machine would reduce labor and other costs by $67,000 per year. The company requires a mini
- The management of Serpas Corporation is considering the purchase of a machine that would cost $180,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and othe
- The management of Mashiah Corporation is considering the purchase of a machine that would cost $290,000, would last for 6 years, and would have no salvage value. The machine would reduce labor and oth
- The management of Serpas Corporation is considering the purchase of a machine that would cost $180,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $46,000 per year. The company requires a min
- The management of Opray Corporation is considering the purchase of a machine that would cost $360,000, would last for 7 years, and would have no salvage value. The machine would reduce labor and other
- The management of Melchiori Corporation is considering the purchase of a machine that would cost $320,000, would last for 7 years, and would have no salvage value. The machine would reduce labor and o
- The management of Melchiori Corporation is considering the purchase of a machine that would cost $310,000, would last for 6 years, and would have no salvage value. The machine would reduce labor and o
- The management of Mashiah Corporation is considering the purchase of a machine that would cost $415,000, would last for 8 years, and would have no salvage value. The machine would reduce labor and other costs by $107,000 per year. The company requires a m
- The management of Mashiah Corporation is considering the purchase of a machine that would cost $520,000, would last for 9 years, and would have no salvage value. The machine would reduce labor and other costs by $108,000 per year. The company requires a m
- The management of Kountz Corporation is considering the purchase of a machine that would cost $74,520 and would have a useful life of 8 years. The machine would have no salvage value. The machine would reduce labor and other operating costs by $20,000 per
- The management of Elamin Corporation is considering the purchase of a machine that would cost $305,745 and would have a useful life of 9 years. The machine would have no salvage value. The machine would reduce labor and other operating costs by $51,000 pe
- Tangen Corporation is considering the purchase of a machine that would cost $394,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $87,000. By reducing labor and other operating costs, the machine would provi
- Sibble Corporation is considering the purchase of a machine that would cost $440,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $82,000. By reducing labor and other operating costs, the machine would provi
- Sibble Corporation is considering the purchase of a machine that would cost $320,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $49,000. By reducing labor and other operating costs, the machine would provi
- Sibble Corporation is considering the purchase of a machine that would cost $320,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $57,000. By reducing labor and other operating costs, the machine would provi
- Sibble Corporation is considering the purchase of a machine that would cost $320,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $50,000. By reducing labor and other operating costs, the machine would provi
- Sibble Corporation is considering the purchase of a machine that would cost $380,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $75,000. By reducing labor and other operating costs, the machine would provi
- Almendarez Corporation is considering the purchase of a machine that would cost $320,000 and would last for 7 years. At the end of the 7 years, the machine would have a salvage value of $51,000. By reducing labor and other operating costs, the machine wou
- The management of Boie Corporation is considering the purchase of a machine that would cost $330,980 and would have a useful life of 6 years. The machine would have no salvage value. The machine would reduce labor and other operating costs by $76,000 per
- The management of Boie Corporation is considering the purchase of a machine that would cost $340,980 and would have a useful life of 6 years. The machine would have no salvage value. The machine would reduce labor and other operating costs by $86,000 per
- A company is considering the purchase of a machine that would cost $320,000 and would last for 7 years. At the end of 7 years, the machine would have a salvage value of $51,000. By reducing labor and other operating costs, the machine would provide annual
- Tangen Corporation is considering the purchase of a machine that would cost $380,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $80,000. By reducing l
- Sibble Corporation is considering the purchase of a machine that would cost $410,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $58,000. By reducing l
- Sibble Corporation is considering the purchase of a machine that would cost $330,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $50,000. By reducing l
- Sibble Corporation is considering the purchase of a machine that would cost $300,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $47,000. By reducing l
- Racewheel Corporation is considering the purchase of a machine that would cost $300,000, would last for 7 years, and would have no salvage value. The machine would reduce labor and other costs by $68,000 per year. The company requires a minimum pretax ret
- The management of Favreau Corporation is considering the purchase of a machine that would cost $310,464 and would have a useful life of 5 years. The machine would have no salvage value. The machine would reduce labor and other operating costs by $84,000 p
- Nevland Corporation is considering the purchase of a machine that would cost $120,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would prov
- Stern Corporation is considering the purchase of a machine that would cost $270,000 and would last for 9 years. At the end of 9 years, the machine would have a salvage value of $38,000. By reducing labor and other operating costs, the machine would provid
- Clairmont Corporation is considering the purchase of a machine that would cost $210,000 and would last for 8 years. At the end of 8 years, the machine would have a salvage value of $20,000. By reducing labor and other operating costs, the machine would pr
- Clairmont Corporation is considering the purchase of a machine that would cost $170,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $19,000. By reducing labor and other operating costs, the machine would pr
- Clairmont Corporation is considering the purchase of a machine that would cost $200,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $20,000. By reducing labor and other operating costs, the machine would pr
- Clairmont Corporation is considering the purchase of a machine that would cost $100,000 and would last for 3 years. At the end of 3 years, the machine would have a salvage value of $15,000. By reducing labor and other operating costs, the machine would pr
- Meharg Corporation is considering the purchase of a machine that would cost $120,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $25,000. By reducing l
- The management of Penfold Corporation is considering the purchase of a machine that would cost $270,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $60,000 per year. The company requires a mi
- The management of Kunkel Company is considering the purchase of a $34,000 machine that would reduce operating costs by $9,000 per year. At the end of the machine's five-year useful life, it will have zero salvage value. The company's required rate of retu
- The management of Kunkel Company is considering the purchase of a $30,000 machine that would reduce operating costs by $6,500 per year. At the end of the machine's five-year useful life, it will have zero salvage value. The company's required rate of retu
- Nevland Corp is considering the purchase of a machine that would cost $130000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of 18000. By reducing labor and other operating costs, the machine would provide annual
- The management of Kunkel Company is considering the purchase of a $22,000 machine that would reduce operating costs by $5,000 per year. At the end of the machine's five-year useful life, it will have zero scrap value. The company's required rate of return
- The management of Kunkel Company is considering the purchase of a $23,000 machine that would reduce operating costs by $5,000 per year. At the end of the machine's five-year useful life, it will have zero scrap value. The company's required rate of return
- The management of Kunkel Company is considering the purchase of a $21,000 machine that would reduce operating costs by $5,000 per year. At the end of the machine's five-year useful life, it will have zero scrap value. The company's required rate of return
- The management of Kunkel Company is considering the purchase of a $32,000 machine that would reduce operating costs by $8,000 per year. At the end of the machine's five-year useful life, it will have zero scrap value. The company's required rate of return
- The management of Penfold Corporation is considering the purchase of a machine that would cost $380,000, would last for 5 years, and would have no salvage value. The machine would reduce labor costs b
- The management of Kunkel Company is considering the purchase of a $40,000 machine that would reduce operating costs by $7,000 per year. At the end of the machine's eight-year useful life, it will have zero scrap value. The company's required rate of retur
- Almendarez Corporation is considering the purchase of a machine that would cost $130,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $19,000. By reduci
- The management of Penfold Corporation is considering the purchase of a machine that would cost $300,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and oth
- (lgnore income taxes in this problem.) The management of Urbine Corporation is considering the purchase of a machine that would cost $350,000, would last for 6 years, and would have no salvage value.
- Clairmont Corporation is considering the purchase of a machine that would cost $190,000 and would last for 10 years. At the end of 10 years, the machine would have a salvage value of $16,000. By reduc
- Aljero corporation is considering purchasing a machine that would cost $243,600 and have a useful life of 8 years. The machine would reduce cash operating costs by $76,125 per year. The machine would have a salvage value of $60,900 at the end of the proje
- The management of Kunkel Company is considering the purchase of a $43,000 machine that would reduce operating costs by $9,000 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $38,000 machine that would reduce operating costs by $8,500 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $35,000 machine that would reduce operating costs by $8,500 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $32,000 machine that would reduce operating costs by $8,000 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $21,000 machine that would reduce operating costs by $5,000 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $41,000 machine that would reduce operating costs by $9,000 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $31,000 machine that would reduce operating costs by $8,500 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $37,000 machine that would reduce operating costs by $8,000 per year. At the end of the machine's five-year useful life, it will hav
- The management of Kunkel Company is considering the purchase of a $30,000 machine that would reduce operating costs by $6,500 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $27,000 machine that would reduce operating costs by $6,500 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $36,000 machine that would reduce operating costs by $8,500 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $26,000 machine that would reduce operating costs by $6,500 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $28,000 machine that would reduce operating costs by $7,000 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $24,000 machine that would reduce operating costs by $6,000 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $20,000 machine that would reduce operating costs by $5,000 per year. At the end of the machine's five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $27,000 machine that would reduce operating costs by $7,000 per year. At the end of the machine?s five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $25,000 machine that would reduce operating costs by $6,000 per year. At the end of the machine?s five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $33,000 machine that would reduce operating costs by $8,500 per year. At the end of the machine?s five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $23,000 machine that would reduce operating costs by $5,000 per year. At the end of the machine?s five-year useful life, it will have
- The management of Kunkel Company is considering the purchase of a $39,000 machine that would reduce operating costs by $9,000 per year. At the end of the machine?s five-year useful life, it will have
- Dunken, Inc., is considering the purchase of a machine that would cost $110,000 and would last for 4 years. At the end of 4 years, the machine would have a salvage value of $18,000. The machine would reduce labor and other costs by $35,000 per year. Addit
- 1. The management of Favreau Corporation is considering the purchase of a machine that would cost $310,464 and would have a useful life of 5 years. The machine would have no salvage value. The machine
- The management of Favreau Corporation is considering the purchase of a machine that would cost $310, 464 and would have a useful life of 5 years. The machine would have no salvage value. The machine w
- Sloman Company is considering purchasing a machine that would cost $436,800 and have a useful life of 5 years. The machine would reduce cash operating costs by $132,364 per year. The machine would have no salvage value. a. Compute the payback period for
- Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $443,000 or a new model 220 machine costing $404,000 to replace a machine that was purchased 12 years ago for $411,000. The old machine was used to mak
- Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $534,000 or a new model 220 machine costing $422,000 to replace a machine that was purchased 5 years ago for $473,000. The old machine was used to make
- The management of Ocala Company is considering the purchase of a $25,000 machine that would reduce operating costs by $4,000 per year. At the end of the machine's 10 year useful life, it will have a zero salvage value. The company requires a 14% on all in
- Clairmont Corporation is considering the purchase of a machine that would cost $160,000 and would last for 4 years. At the end of 4 years, the machine would have a salvage value of $17,000. By reducin
- Clairmont Corporation is considering the purchase of a machine that would cost $110,000 and would last for 4 years. At the end of 4 years, the machine would have a salvage value of $16,000. By reducin
- Clairmont Corporation is considering the purchase of a machine that would cost $130,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $19,000. By reducin
- Clairmont Corporation is considering the purchase of a machine that would cost $220,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $21,500. By reducin
- Clairmont Corporation is considering the purchase of a machine that would cost $150,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $18,000. By reducin
- Clairmont Corporation is considering the purchase of a machine that would cost $160,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $19,000. By reducin
- Clairmont Corporation is considering the purchase of a machine that would cost $120,000 and would last for 4 years. At the end of 4 years, the machine would have a salvage value of $18,000. By reducin
- Clairmont Corporation is considering the purchase of a machine that would cost $200,000 and would last for 7 years. At the end of 7 years, the machine would have a salvage value of $26,000. By reducin
- Clairmont Corporation is considering the purchase of a machine that would cost $180,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $18,000. By reducin
- Clairmont Corporation is considering the purchase of a machine that would cost $210,000 and would last for 8 years. At the end of 8 years, the machine would have a salvage value of $20,000. By reducin
- Gocke Company is considering purchasing a machine that would cost $478,800 and have a useful life of 5 years. The machine would reduce cash operating costs by $114,000 per year. The machine would have no salvage value. Required: A. Compute the payback per
- A firm is considering purchasing a machine that costs $57,000. It will be used for six years, and the salvage value at that time is expected to be zero. The machine will save $35,000 per year in labor, but it will incur $10,000 in operating and maintenanc
- Brewer Company is considering purchasing a machine that would cost $285,120 and have a useful life of 5 years. The machine would reduce cash operating costs by $89,100 per year. The machine would have a salvage value of $107,180 at the end of the project.
- Brewer Company is considering purchasing a machine that would cost $510,510 and have a useful life of 8 years. The machine would reduce cash operating costs by $100,100 per year. The machine would have a salvage value of $107,290 at the end of the project
- A company with a calendar year-end purchases a machine costing $129,000 on July 1, 2016. The machine is expected to be obsolete after five years (60 months) and, thereafter, no longer useful to the company. The estimated salvage value is $6,000. The compa
- Weilbacher Corporation is considering the purchase of a machine that would cost $240,000 and would last for 8 years. At the end of 8 years, the machine would have a salvage value of $50,000. The machi
Explore our homework questions and answers library
Browse
by subject